When peanuts’ don’t cost peanuts anymore

Story by LinkSFarM team/CRS.

Valderrama, a province in Antique, Western Visayas, Philippines, is a rice-peanut growing municipality and their farmers have long depended on traders who can finance their farm production and buy their harvests.

But in 2005, this gradually changed when Catholic Relief Services (CRS) project of Linking Smallholder Farmers to Market or LinkSFarM assisted the farmers to improve their peanut production practices and to market their produce as a group in order to access appropriate markets and get better prices.

Under LinkSFarM, a trained agroenterprise (AE) facilitator team from DAR and the LGU introduced to the farmers the idea of establishing their agroenterprise in peanut marketing. The team organized small groups or clusters to facilitate product consolidation, namely: Katilingban kang Magagmay nga Mangunguma sang Pandanan (KAMPA), Tigmamale Agrarian Reform Cooperative (TARC) and Buluangan 1 Multi-Purpose Cooperative (B1MPC).

With support from a site working group involving Department of Agrarian Reform (DAR), Local Government Unit (LGU) and Antique Federation of NGOs (AFON), representatives of the famer clusters were guided in various market preparation activities that included supply assessments, market visits to meet prospective buyers and get to know how peanut is traded, and business planning.

Utilizing market information, the clusters chose to market to two consolidator/wholesaler buyers: Sixto Trading in Iloilo, and Betty Robelo in Kalibo, Aklan. To ensure high product quality, the facilitator team also assisted the farmers in looking for and acquiring a good peanut sheller.

Last July 18, 2016, the farmers’ group had their first test delivery done for Sixto Trading.  As part of the trial, they sold unshelled and shelled peanuts and learned that it would be more advantageous to sell in shelled form. With this experience, they proceeded with their second test delivery to the second buyer, Betty Robelo, and this time, they opted to market only shelled peanut to get the most value in their product.

The farmers were happy with the test marketing results.

“For 35 years, I have relied only on the local trader who set the price of my product.  If I had sold to the trader my peanuts, I would be getting a price per kg of only P28 to P32.  KAMPA paid me a higher price at P42/kg,” said Isidro Magua, one of the members of the cluster group.

What excites the farmers is that they can get higher price in two ways:  from bulking their peanuts to sell to consolidator/wholesalers, and from undertaking the additional step of shelling their peanut.

“This gave me an extra income of P6000 from my peanut harvest which I used to buy inputs for my rice,” said Isidro who intends to continue to join the group marketing and will also encourage more fellow farmers to be involved.

Jessie Marfil from the LGU explains, “Buyers are willing to pay a price of P78/kg for Grade 1 shelled peanut. Based on test marketing experience, the recovery of 700 grams shelled peanut for every kilogram of unshelled peanut collectively marketed translates into a value addition of P18.14/kg.”

KAMPA gave P10/kg of this value addition outright to the farmers as an added price, a benefit they would not have gotten if they sold only to the local traders. In addition, the enterprise facilitated local employment to 15 elderly and idle women to do the peanut sorting and cleaning, for which they are paid P150.00/day.

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